Builders happy with low interest rates on housing loans

An association of housing developers in Davao city said the more affordable housing loan interest rates now offered by the Home Mutual Development Fund or the Pag-ibig Fund should help perk up anew the construction of socialized housing units across the country.

The low interest rate environment should also help reduce at a faster rate the national housing backlog of some 4 million units that has not been addressed effectively for several years already, Carlito Dublan, president of the Davao regional chapter of the Organization of Socialized Housing Developers of the Philippines, said.

Dublan said the Pagibig Fund has reduced its interest rate to 7 percent since last year. “This put that agency at the competitive level with the banks, which impose between 6.5 percent and 7 percent,” he said.

But he added the housing developers have a request pending action from the government concerning the price of socialized housing units, saying that at Php400,000 to Php450,000 per unit “is the price that is not reflective of current market prices.”

“That’s the price 10 years ago. Now the land we are buying are more than double the price 10 years ago,” he said.

That would explain why developers “have to be creative” to fit the government price model. He did not say if this model also imputes the complaints of homeowners about substandard materials or inadequate number of building materials, such as steel bars, for certain parts of the house, like the roof and ceiling support.

“Let’s watch over the next few months if the changes in the housing sector are implemented soon,” he added.

Dublan said the reforms in the construction sector include the several items that housing developers were able to wrench from Housing Land Use and Regulatory Use and the other national government housing agencies.

“Many of these reforms that we ask them were mostly regulations that are too restrictive for us in the private construction sector,” he said.

For instance, “we were able to persuade the government to throw away their regulation that we have to comply with their fixed deadline of one year to three years to construct a housing project”.

“This time, they would look at the individual work program that developers would submit to them, where the timetable is also included,” he said.

Cebu I.T. Park - a vibrant 27-hectare master planned development and home to over 70 percent of Cebu’s BPO industry. It is located in ...

About This Blog

Vernon Joseph Go is a Corporate Mad Hatter passionate about learning, technology, simplified finance as well as Inclusive Businesses through Social Entre/Intrapreneurship Development by bridging purpose and profit.